DiNapoli calls on DMV to crack down on unregistered auto-repair shops; DMV responds

The New York State Department of Motor Vehicles (DMV) “has not done enough” to prevent automotive-repair shops and inspection stations from operating without valid registrations, New York State Comptroller Thomas DiNapoli contends.

It is “putting consumers at an increased risk to be scammed by dishonest businesses,” according to an audit that DiNapoli issued Tuesday.

“DMV has a responsibility to help prevent consumers from being taken for a ride by unscrupulous repair shops,” DiNapoli said. “This means doing more to ensure that New York’s repair shops are legitimately registered and working harder to investigate and resolve consumer complaints in a timely manner.”

But the audit revealed DMV has established “little in the way of controls” to restrict unregistered repair shops from operating.

DMV officials disagreed with “some” of the audit findings, DiNapoli’s office said, noting that the DMV response is included in the audit’s final report.

A finding, a response

A review of DMV data identified about 23,600 automotive businesses with expired licenses or registrations, according to the news release.

Of those, auditors selected 170 used-car dealerships and repair shops with lapsed registrations and found 22 percent of these businesses with “strong indications” of continued operations.

The operations included employees working on multiple cars; and dealerships with multiple cars being advertised for sale, “warranting additional investigation by DMV,” DiNapoli’s office said.

The DMV “disagrees” with the finding, Theresa Egan, DMV executive deputy commissioner, wrote in a letter to DiNapoli’s office.

Observations alone are “insufficient” to support the state comptroller’s conclusion, Egan wrote.

“Determining whether a facility is one that ought to be registered requires more than a cursory observation from the curb. Any of the facilities in [the state comptroller’s] sample set could be performing oil changes, tire changes, installing aftermarket equipment and or modifications such as stereos, plows, performance parts, etc. … none of which require the owner to register with DMV,” according to Egan’s letter.

The facility could also be doing work for one commercial proprietor or “not for pay,” and of if so, it does “not have to register.”

Similarly, a “cursory observation cannot determine” that an entity is a dealer, Egan’s letter contends.

“For example, at least three vehicles must be displayed for sale in a month or five are sold in a year for registration with the DMV to be required. DMV receives [between] 250 [to] 300 customer complaints each year alleging that a facility is unlicensed. In 2016, approximately 100 of these cases resulted in a finding that the facility was unlicensed. In those instances, the department takes administrative action intended to encourage such facilities to register with the department,” Egan wrote.

Recommendations

As a result of the audit, DiNapoli recommended DMV officials take steps to improve the identification of potentially unregistered facilities and determine whether they continue to operate.

He also recommended the department develop a “structured process for periodic” coordination with the New York State Department of Environmental Conservation to compare its listing of dismantlers with dismantlers registered with the department.

Such coordination would seek to identify facilities that may be unregistered, improperly registered, or not reporting as required, DiNapoli’s office said.

Contact Reinhardt at ereinhardt@cnybj.com